The purchasing power of the dollar is not nearly as strong as it once was, and as a result our standard of living is rapidly going down. The overall rate of inflation has been rising faster than our paychecks have been for quite a while, and this is causing a tremendous amount of pain for millions of U.S. consumers. Unfortunately, this isn’t going to change any time soon. The inflation monster that our leaders have created will continue to rage even as our economy plunges into a severe recession. I relentlessly warned that the trillions of dollars that our leaders were pumping into the system would cause enormous problems down the road, and now we are trapped in an economic nightmare with no easy way out.
On Wednesday, we learned that the rate of inflation in the United States jumped even higher last month…
Shoppers paid sharply higher prices for a variety of goods in June as inflation kept its hold on a slowing U.S. economy, the Bureau of Labor Statistics reported Wednesday.
The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981.
Of course the way that inflation is calculated today is much different from the way that it was calculated back in the 1980s. If the way that inflation was calculated had not been changed, the official inflation rate would be much higher right now.
But even if you want to take the 9.1 percent figure at face value, it is still extremely high, and last month energy and food prices were two of the main reasons why we witnessed such a dramatic surge…
- Gas: 59.9%
- Electricity: 13.7%
- Food at home: 12.2%
- New vehicles: 11.4%
- Food away from home: 7.7%
- Used cars and trucks: 7.1%
- Shelter: 5.6%
- Apparel: 5.2%
Let’s focus on that “food at home” category for a moment.
Every single one of us needs to eat, and so this is something that is deeply affecting all of us.
And right now we are seeing rapid price increases in almost aisle of the grocery store…
- Cereals and cereal products: +15.1%
- Beef and veal: +4.1%
- Pork: +9.0%
- Poultry: +17.3%
- Fish and seafood: +11.0%
- Eggs: +33.1%
- Dairy and related products: +13.5%
- Fresh fruits: +7.3%
- Fresh vegetables: +6.5%
- Juices and nonalcoholic drinks: +11.6%
- Coffee: 15.8%
- Fats and oils: 19.5%
- Baby food: 14.0%
Has your paycheck gone up by a similar amount over the past year?
If not, you are losing ground and your standard of living is declining.
Overall, real wages in the United States have now fallen for 15 months in a row.
In all the years I have been writing, I have never seen anything quite like this.
According to one expert that was interviewed by the Daily Caller, “American families are being crushed” by the inflation tsunami that we are witnessing right now…
Under the Biden administration, skyrocketing fuel costs and exploding inflation are hurting everyday Americans the most, according to an economist at the Heritage Foundation.
“Energy prices are trickling down into everything and American families are being crushed,” E.J. Antoni, a research fellow for regional economics in the Center for Data Analysis at The Heritage Foundation, told the Daily Caller News Foundation.
Antoni also says that the average worker in the United States has “lost the equivalent of almost $3,400 in annual income” due to declining purchasing power since Joe Biden entered the White House…
“The average worker has lost the equivalent of almost $3,400 in annual income since Biden took office,” Antoni explained.
Real average hourly earnings decreased 3.6% from June 2021 to June 2022, according to recent Bureau of Labor Statistics (BLS) numbers. The change in real average hourly earnings combined with a decrease of 0.9% in the average workweek resulted in a 4.4% decrease in real average weekly earnings over this period.
“This is catastrophic, $3,400 is some people’s food budgets for a year,” Antoni continued.
The good news, if that is what you want to call it, is that the inflation rate will probably subside just a bit during the next few months.
I have to admit that I agree with Jay Hatfield’s assessment of the situation…
Jay Hatfield, CEO at Infrastructure Capital Advisors, says this may signal the peak. “We forecast that this print will mark the peak of inflation as the Fed’s 15% shrinkage of the monetary base, which is the fastest decline since the great depression, will curb inflation as the QT has caused the dollar to appreciate by over 12% this year which has caused commodities to plummet by over 20% since the measurement period for June CPI.”
We are starting to see the size of the Fed’s balance sheet go down, and the Fed is likely to continue to aggressively raise interest rates in the months ahead.
Both of those moves are likely to add significant momentum to our economic slowdown, and demand will be suppressed.
Meanwhile, economic conditions will rapidly deteriorate as we plunge into an excruciatingly painful recession.
Won’t that be fun?
Unfortunately, even a deep recession will not be enough to tame the inflation monster, because our Congress critters continue to spend money like drunken sailors.
And I am entirely convinced that global supply problems will continue to escalate for a variety of reasons.
So even though demand will be suppressed, inflation is not going away.
I would encourage you to get prepared for the very painful years that are ahead of us while you still can.
You may think that economic conditions are bad now, but the truth is that we haven’t seen anything yet.
The entire system is starting to crumble, and our clueless leaders seem to be all out of answers at this point.
Article posted with permission from Michael Snyder
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